Prudential supervision is, in essence, the monitoring of ________
A) borrowers, to enforce restrictive covenants
B) intermediaries, to direct credit to preferred sectors of the economy
C) holders of an insurance policy, to discourage excessively risky behaviors
D) depositors, to discourage sudden withdrawal of funds
C
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A key international institution that plays an important role in exchange rate determination is the
A) U.S. Currency Board. B) European Central Bank. C) World Bank. D) International Monetary Fund.
Compared to a barter economy, using money increases efficiency by reducing:
a. transaction costs. b. the need to exchange goods. c. the need to specialize. d. inflation.
Which of the following is true of markets characterized by positive externalities?
a. Social value exceeds private value, and market quantity exceeds the socially optimal quantity. b. Social value is less than private value, and market quantity exceeds the socially optimal quantity. c. Social value exceeds private value, and market quantity is less than the socially optimal quantity. d. Social value seldom exceeds private value; therefore, social quantity is less than private quantity.
You put money into an account and earn a real interest rate of 6 percent. Inflation is 3 percent, and your marginal tax rate is 20 percent. What is your after-tax real rate of interest?
a. 4.8 percent b. 5.4 percent c. 7.2 percent d. 4.2 percent.